Work Opportunity Tax Credit

Last Updated: August 13, 2021

The Issue

The Work Opportunity Tax Credit (WOTC) is a program designed to encourage employers to hire people who have difficulty finding work. Eligible workers include various classes of veterans and those on different public assistance programs. When employers hire qualified workers, they can claim anywhere from $1,200 to $9,600 per employee depending on a variety of factors. The “tax extenders” package that became law at the end of 2015 extended WOTC for an additional five years. The package also modifies WOTC to expand the categories of employees for which the credit applies. Under the revised WOTC, employers could be eligible for tax credits by employing a “qualified long-term unemployment recipient.” At the end of 2020 Congress extended WOTC for a subsequent five years, set to expire in 2025.

Retail Impact

Many convenience retailers use the WOTC credit to help them provide employment for individuals who are having a hard time finding work. This gives job applicants the “foot in the door” they may need to get the job they need with a c-store company. The changes included in the 2015 tax extenders package will help convenience retailers and eligible individuals.

NACS Position

NACS supports the extension of the WOTC.